Quick Quotes

RSS News Feeds

Correction to This Article
An Aug. 26 Business article about federal raids on people suspected of trading music and movies over the Internet incorrectly referred to Skype, which provides telephone service over the Internet, as a file-sharing service. It uses similar peer-to-peer technology but does not share files.

Suspected File-Sharing 'Hubs' Raided

Federal agents yesterday took their first steps to go after individuals who illegally trade copyrighted music and videos over the Internet, seizing computers, software and related equipment at five homes around the country.

After a months-long sting operation, FBI agents raided residences in Texas, Wisconsin and New York where people were suspected of operating "hubs" of file-sharers that were part of a system called the Underground Network. About 7,000 users connected to the network via file-sharing software known as Direct Connect, according to law enforcement officials.

Among the copyrighted works that were downloaded for free by an undercover agent who signed up for the service was a studio-screening copy of the movie "Cold Mountain," before it had been released in theaters or on DVD. Altogether, the agent downloaded about 84 movies, 40 software programs, 13 games and 178 sound recordings from five hub sites, according to court documents.

No arrests were made yesterday, and no charges have been filed. But the raids for the first time throw the weight of the Justice Department behind what has been an intense campaign by the music, movie and software industries to curb online file-sharing that millions of computer users around the world use every day.

Already, more than 4,600 file-sharers have been sued by the recording industry in a high-profile campaign to get people to give up the practice. Now, the prospect of criminal prosecution looms for those who steal copyrighted works valued at more than $2,500, which qualifies as a felony.

"Today's actions send an important message to those who steal over the Internet," Attorney General John D. Ashcroft said in a statement. "The Department of Justice is committed to enforcing intellectual property laws, and we will pursue those who steal copyrighted materials even when they try to hide behind the false anonymity of peer-to-peer networks."

The action is sure to stoke an already heated debate over file-sharing services, many of which have become household names, such as Kazaa, Grokster and Morpheus. Kazaa claims more than 30 million users who have downloaded more than 1 billion files.

The entertainment industry, which hailed yesterday's action, has tried to get U.S. courts to shut down the file-sharing networks, arguing that they exist primarily to enable people to get copies of copyrighted works without paying for them.

Those efforts have largely failed; just last week, the U.S. Court of Appeals for the 9th Circuit ruled that providers of underlying technologies cannot be held responsible for the illegal actions of some users. Operators of file-sharing networks argue that their services also are used for legal transfer of digital entertainment and software.

One file-sharing service, Skype, provides the equivalent of telephone service over the Internet.